For allegedly using “a sophisticated market manipulation scheme”, two people have been charged in the U.S. for defrauding and stealing $17M in Bitcoin and ether from users of three cryptocurrency exchanges all over the world. The targeted exchanged were Binance, Poloniez, and Gemini.
Users of Binance, Poloniex, and Gemini Targeted
The US DOJ announced last week that two Russian nationals were charged with crimes in relation with “an alleged conspiracy to defraud three cryptocurrency exchanges and their customers of cryptocurrency valued … at a minimum of $16.8 million in cryptocurrency.”
Danil Potekhin (aka cronuswar) and Dmitrii Karasavidi (aka Dmitriy Karasvidi) have purportedly stolen at least $16,876,000 in authorization and cryptocurrency from users of crypto exchanges Poloniex, Binance, and Gemini.
The accused men have created numerous web domains have mimicked the three legitimate crypto exchanges in the year 2017. Through the use of phishing and spoofing tactics, they deceitfully obtained the login credentials of more than 150 exchange users. It includes email addresses, passwords and other personal information. This has allowed them to access the victims’ accounts in real exchanges.
Aside from stealing the victims’ cryptocurrencies, Potekhin and Karasavidi have engaged with the price manipulation of the GAS cryptocurrency in what the allegation document described as “a sophisticated market manipulation scheme that began in July 2017 using the stolen customer credentials.” It has used the funds valued over $5M in the accounts of the three victims; the defendants have purchased a massive amount of GAS token, the reason for its price upsurge. The pair has hastily converted their tokens into bitcoin and some other cryptocurrencies, this has caused the price of GAS to plummet, and it leaves the victims with invaluable coins.
The defendants then laundered the theft proceeds “and attempted to conceal the nature and source of the digital currency by transferring them in a layered and sophisticated manner through multiple accounts,” the DOJ described. “Ultimately, a significant amount of the stolen digital currency was deposited into Karasavidi’s account.”
The theft proceeds have been laundered by the defendants “and attempted to conceal the nature and source of the digital currency by transferring them in a layered and sophisticated manner through multiple accounts,” the DOJ labelled. “Ultimately, a significant amount of the stolen digital currency was deposited into Karasavidi’s account.”
The two Russian nationals have been charged with a conspiracy that commits computer fraud and abuse, computer fraud, conspiracy to commit wire fraud, money laundering conspiracy, and two counts of aggravated identity theft, the DOJ detailed.
The U.S. Attorney has also sought the forfeiture of cryptocurrencies and dollars that are allegedly traceable to the defendants’ crimes. Adding to more than $6M in U.S. dollars, law enforcement has seized BTC and ETH in December 2017, amounting to over $12.62M during that time. Several cryptocurrencies were held in August last year, including BTC, which values for about $2.60M in total during that time. All the assets that were seized are now in the custody of the U.S. Secret Service.